NOOK Media, LLC, a subsidiary of Barnes & Noble, Inc. (NYSE: BKS),
the leading retailer of content, digital media and educational products,
today announced that Pearson (NYSE: PSO), the world’s leading learning
company, has agreed to make a strategic investment in NOOK Media, LLC.
Pearson has agreed to invest $89.5 million in cash in NOOK Media, LLC at
a post-money valuation of approximately $1.789 billion in exchange for
preferred membership interests representing 5% equity stake. Following
the closing of the transaction, Barnes & Noble will now own
approximately 78.2% of the NOOK Media subsidiary and Microsoft, which
also holds preferred membership interests, will own approximately 16.8%.
Subject to certain conditions, Pearson will earn the option to purchase
up to an additional five percent ownership in NOOK Media.
Pearson’s strategic investment in NOOK Media will accelerate customer
access to digital content by pairing its leading expertise in online
learning with NOOK Media’s expertise in online distribution and customer
service. This will facilitate improved discovery of available digital
content and services, as well as seamless access.
"We formed NOOK Media to be a leader in the exploding market for digital
content," said William Lynch, Chief Executive Officer of Barnes & Noble,
Inc. "Pearson is a forward thinking company similarly focused on reading
and learning, with powerful assets and a terrific management team. We
welcome their partnership in NOOK Media, and look forward to working
with them and Microsoft to deliver great digital experiences for our
shared customers."
Will Ethridge, Chief Executive Officer of Pearson North America, said,
"Pearson and Barnes & Noble have been valued partners for decades, and
in recent years both have invested heavily and imaginatively to provide
engaging and effective digital reading and learning experiences. This
new agreement extends our partnership and deepens our commitment to
provide better, easier experiences for our customers. With this
investment we have entered into a commercial agreement with NOOK Media
that will allow our two companies to work closely together in order to
create a more seamless and effective experience for students. It is
another example of our strategy of making our content and services
broadly available to students and faculty through a wide range of
distribution partners."
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE: BKS) is a Fortune 500 company and the
leading retailer of content, digital media and educational products. The
company operates 689 Barnes & Noble bookstores in 50 states, and one of
the Web’s largest e-commerce sites, BN.com (www.bn.com).
Its NOOK Media LLC subsidiary is a leader in the emerging digital
reading and digital education markets. The NOOK digital business offers
award-winning NOOK® products and an expansive collection of digital
reading and entertainment content through the NOOK Store™ (www.nook.com),
while Barnes & Noble College Booksellers, LLC operates 674 bookstores
serving over 4.6 million students and faculty members at colleges and
universities across the United States. Barnes & Noble is proud to be
named a J.D. Power and Associated 2012 Customer Service Champion and is
only one of 50 U.S. companies so named. Barnes & Noble.com is ranked the
number one online retailer in customer satisfaction in the book, music
and video category and a Top 10 online retailer overall in customer
satisfaction according to ForeSee E-Retail Satisfaction Index (Spring
Top 100 Edition).
General information on Barnes & Noble, Inc. can be obtained via the
Internet by visiting the company's corporate website: www.barnesandnobleinc.com.
About NOOK Media LLC
NOOK reading and entertainment products make it easy to read what you
love, anywhere you like™ with a fun, easy-to-use and
immersive digital reading experience. With NOOK, customers gain access
to the expansive NOOK Store™ of more than 3 million digital
books, plus periodicals, comics, apps, movies and TV shows, and the
ability to enjoy content across a wide array of popular devices through
free NOOK Reading Apps™ and NOOK Video apps, available at www.nook.com/freenookapps.
NOOK owners receive Always Free NOOK Support in any of Barnes & Noble’s
nearly 700 bookstores. Find NOOK devices in Barnes & Noble stores and
online at www.nook.com,
as well as leading retailers including Best Buy, Walmart, Target and
many others. NOOK products are available in the United Kingdom through www.nook.co.uk and leading
retailers.
For more information on NOOK, follow us on www.twitter.com/nookBN
or www.twitter.com/nook_UK
and www.facebook.com/nook.
About Pearson
Pearson, the world’s leading learning company, has global reach and
market-leading businesses in education, business information and
consumer publishing (NYSE: PSO).
Forward-Looking Statements
This press release contains certain forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended) and
information relating to Barnes & Noble that are based on the beliefs of
the management of Barnes & Noble as well as assumptions made by and
information currently available to the management of Barnes & Noble.
When used in this communication, the words "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "will" and similar expressions,
as they relate to Barnes & Noble or the management of Barnes & Noble,
identify forward-looking statements.
Such statements reflect the current views of Barnes & Noble with respect
to future events, the outcome of which is subject to certain risks,
including, among others, the general economic environment and consumer
spending patterns, decreased consumer demand for Barnes & Noble's
products, low growth or declining sales and net income due to various
factors, risk that international expansion will not be successfully
achieved or may be achieved later than expected, possible disruptions in
Barnes & Noble's computer systems, telephone systems or supply chain,
possible risks associated with data privacy, information security and
intellectual property, possible work stoppages or increases in labor
costs, possible increases in shipping rates or interruptions in shipping
service, effects of competition, possible risks that inventory in
channels of distribution may be larger than able to be sold, possible
risk that returns from consumers or channels of distribution may be
greater than estimated, the risk that the expected sales lift from
Borders’ store closures is not achieved in whole or part, the risk that
digital sales growth is less than expectations and the risk that it does
not exceed the rate of investment spend, higher-than-anticipated store
closing or relocation costs, higher interest rates, the performance of
Barnes & Noble's online, digital and other initiatives, the performance
and successful integration of acquired businesses, the success of Barnes
& Noble's strategic investments, unanticipated increases in merchandise,
component or occupancy costs, unanticipated adverse litigation results
or effects, product and component shortages, the potential adverse
impact on the business resulting from the review of a potential
separation of the NOOK digital business, the risk that the transactions
contemplated with Pearson are not able to be implemented on the terms
contemplated or at all, the risk that the transactions do not achieve
the expected benefits for the parties including the risk that NOOK
Media’s applications are not commercially successful or that the
expected distribution of those applications is not achieved, the risk
that any subsequent spin-off, split-off or other disposition by Barnes &
Noble of its interest in NOOK Media results in adverse impacts on
Company or NOOK Media (including as a result of termination of
agreements and other adverse impacts), the potential impact on Barnes &
Noble’s retail business of the separation, the potential tax
consequences for Barnes & Noble and its shareholders of a subsequent
spin-off, split-off or other disposition by Barnes & Noble of its
interest in NOOK Media, the risk that the international expansion
contemplated by the relationship is not successful, the risk that NOOK
Media is not able to perform its obligations under the commercial
agreement, the risk that Barnes & Noble may not recoup its investments
in the NOOK digital business as part of any separation transaction, the
risks, difficulties, and uncertainties that may result from the
separation of businesses that were previously co-mingled including
necessary ongoing relationships, and potential for adverse customer
impacts and other factors which may be outside of Barnes & Noble’s
control, including those factors discussed in detail in Item 1A, "Risk
Factors," in Barnes & Noble's Annual Report on Form 10-K and Form
10-K/A, and in Barnes & Noble's other filings made hereafter from time
to time with the SEC. Our forward looking statements relating to
international expansion are also subject to the following risks, among
others that may affect the introduction, success and timing of the NOOK
e-reader and content in countries outside the United States: we may not
be successful in reaching agreements with international companies, the
terms of agreements that we reach may not be advantageous to us, our
NOOK device may require technological changes to comply with applicable
laws, and marketplace acceptance and other companies have already
entered the marketplace with products that have achieved some customer
acceptance.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent written
and oral forward-looking statements attributable to Barnes & Noble or
persons acting on its behalf are expressly qualified in their entirety
by the cautionary statements in this paragraph. Barnes & Noble
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this communication.
